| Home | Interview with Bethany McLean, senior writer, Fortune Magazine -- June 2005
September 14, 2014

Bethany McLean, 34, is a senior writer at Fortune Magazine and co-author of "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron." McLean's March 2001 article in Fortune titled, "Is Enron Overpriced?," was the first in a national publication to openly question the company's dealings. McLean graduated from Williams College in 1992 with a double major in math and English. She worked as an investment banking analyst at Goldman Sachs until 1995, when she joined Fortune as a reporter. She spoke with about her coverage of the scandal.
Bethany McLean What has been the reaction from other journalists to the recent documentary film about Enron that your stories and book spawned?

Bethany McLean: Honestly, I haven't heard that much from journalists other than the people at Fortune. A lot of people at Fortune have gone to see it. People, for most part, have been really supportive of it. They laugh when they see it, because it's odd to see one of your colleagues on the big screen. But people have made an effort and gone and seen it. The movie has gotten good reviews on the media side of things. But otherwise, I haven't heard that much from other journalists. At what point during your early Enron reporting did you know you were onto something big?

Bethany McLean: I really didn't. Every step of the way, it surprised me. I fought myself a lot for, early on, not having sense to dig further. When I think back to that time, in early 2001, the idea that one of the largest companies in the country could be involved in fraud and be bankrupt - that wasn't conceivable. I had never seen that happen before. I knew something was wrong, I knew something didn't add up. But the idea that it would all collapse like this - it just wasn't conceivable. When I wrote the first story, I actually thought that I would write about them again. I kept my notes organized for a reason. But I never thought I would do it in this grand cultural theme that I ended up writing about. When the company went bankrupt again, it just went from bankrupt to cultural icon. The story of Enron leapt off the business pages and became a part of the national consciousness in a way that WorldCom and Tyco didn't. When it became a story that can make a movie and do well, then it's like, wow. So I was catching up to reality rather than other way around. Did you ever think Enron coverage would become such an iconic story in business journalism? What do you think about the level of exposure the story has received?

Bethany McLean: I didn't. Certainly not when I wrote that first piece on Enron. At that time, no one cared. It wasn't like I wrote a story and got calls from other journalists, saying "Good job." I got a few calls, but it was a very underground type of thing - people in the business community mostly. Few other journalists e-mailed me. It wasn't like anybody cared. I didn't go on TV to talk about the story. So when people say, "Don't you want to work on a big story?" How do you know what's a big story? You just have to follow your instincts, report and see where the cards fall. But you don't know what will be a big story. It wasn't until nine months later that I had any idea of the scope and significance of this story.

And I hope people keep this at the front of their minds. It does tell the larger picture of what went wrong in corporate America. I don't think Enron is an isolated incident of people in a dark corner doing bad things. ... It was all a game to meet Wall Street expectations and keep their stock prices up. So many companies engaged in that behavior. With so many companies, their financial picture paints some mixture of reality and illusion. In Enron's case, it was more illusion than reality. In other companies, I hope it's more reality, but you have some illusion all of the time. There was this attitude that you do anything you can to meet Wall Street expectations, get your millions and get out. That short-term view of what business is is incredibly dangerous, and I hope Enron does stay front-in-mind for people. With talk about privatizing Social Security and people making decisions about the market for their financial future, it's important that people not be naïve about the way information travels and how people lie to you. In the 1990s, I think people were sold on the idea that if you are an individual investor, you can compete and you are on a level playing field with institutional investors, and it absolutely is not true. Looking back, what would you change about how you reported that story?

Bethany McLean: I don't think I'd change that much about the original story, with the exception that I left out of it any mention of the partnerships that Andy Fastow ran, which later came to be a critical part of the story. Not because I didn't know. I had asked him about it.

But I think I was naïve about the corruption between accounting firms and a company's leaders and board of directors. I thought I was crazy to think anything was weird about them. I wish I hadn't been as naïve about that aspect of the story. And I think one of the faults of magazine journalists is this "hit me with your best shot" attitude - we do a big story and then move on to the next story. But newspaper journalists have to cover the story, day after day. I think you need an element of newspaper journalist in you. Maybe you don't move on, and you work more on the story in front of you. I wish I kept digging. I wish I stayed focused on Enron.

Though, there's a little bit of relief that comes with that as a magazine writer. That when you're done with the story, you're done with it. You get to put your notes in a dark corner and never look at them again. Sometimes that's good. Sometimes that's letting go too quickly. The Enron scandal stories have given you somewhat of a celebrity status. How has that changed your life and work?

Bethany McLean: It does less than you might think. I still make phone calls to people and they say, "Stephanie?" "Daphne?" I always giggle when anyone says "Everyone knows you," because it's a very narrow part of the world. I think it's good when people know my name because they take me more seriously in some ways. I think it's probably helpful. I have a soft voice, so I don't come across as somebody who needs to be dealt with it. And I have noticed a little change when I call people and they're like "Stephanie" and "Daphne," and then they clearly do a Google search. And they call me back and their tone is a little bit different.

But I hope it doesn't change things that much. I have gotten a couple comments that "When you do stories, that you're just out to do another Enron." That's totally not the case. I'm there to do what the story is. If it's a positive story, then it's a positive story. I don't want to be the one-person hit squad. And even if I write about a controversial company, I want people to have the comfort that I will listen to both sides of the story and then write about them. But I don't want them to think that I will only write the most negative part of the story. I don't want to get that reputation. What challenges do you face as a magazine reporter in the world of minute-by-minute news? How can you keep your stories relevant and still break new ground?

Bethany McLean: I think that's a really big challenge. Because you can't count on having information that's not widely out there. You have to be out there to supply context that, perhaps, daily breaking news can't do. You have to supply some thought that people supplying news on a minute-by-minute schedule can't do. In some cases, we have an advantage that we are able to write a story that daily journalists aren't even thinking about because they don't have the time to think about it. We might see something that the daily rush for news overlooks. Sometimes that allows us to be naïve about things, because we may think something is new and interesting, but really it's well known. Also I'm not a beat reporter, so I have to start from scratch. Sometimes that's an advantage because I see something in the picture that others don't. Other times, it's a huge hurdle to overcome. Before becoming a reporter, you worked as an investment analyst on Wall Street for Goldman Sachs. What made you want to leave a high-paying job on Wall Street to go into magazine journalism? And how were you able to go from Wall Street to one of the top financial magazines with little journalism experience?

Bethany McLean: I have never been a person with a huge plan. I was on my way to business school as a third-year analyst at Goldman. And I just got this idea in my head that I wanted to be a business journalist. But there was not this big mission to be a magazine journalist. Frankly, no one would hire me. I had no clips, no experience. People were like, "yeah, right." I was willing to get a job sending faxes somewhere. Honestly, I got lucky and got a job at Fortune.

At that time, Fortune hired people as fact-checkers. So it was okay that I hadn't been a reporter before. They were just looking for someone who could calculate compound annual growth rate and read a balance sheet. So I really got lucky. Especially since I started Fortune in 1995 when we saw this explosion in business journalism. Even though my first stories were not well-written works of art, I got a second and third chance because the magazine needed copy. I think it's far more difficult for people today who are in my shoes. I see people coming in with the backgrounds they do now and I know I wouldn't get a job here today. But there was such a hunger for copy in the 1990s that I was able to get more chances than people are able to now. But how did you come across Fortune of all publications?

Bethany McLean: The guy I was dating at the time, his father knew someone at Fortune. I said, "Why don't you send my resume there," and he's like, "yeah, right." But through the fact-checking door, I got in. So it was purely random. That's much harder to do today because Fortune doesn't hire anyone today just as fact-checkers. … And the people coming in today are writing for newspapers and winning awards, so they have lot more experience than I did. What did you think of the quality of business journalism when you were an investment analyst? How has the last decade as a business reporter changed your view on that, if at all?

Bethany McLean: It's hard for me to judge what I thought of business journalism. I was so young and naïve. I went to a liberal arts school and never read The Wall Street Journal. I didn't have the knowledge to make an opinion about the world of business journalism. I definitely was surprised when I got to Fortune, about the emphasis of writing over understanding finance. Most journalists have a background in writing, and not a background in personal finance. The attitude has always been that you can teach someone business but you can't teach someone to write. I don't agree with that. I think you can understand numbers. I'm not a forensic accountant by any means, but it's not that complicated to get an understanding of how an income statement and balance sheet work. I think writing can come with practice as well. … When I first started working at Fortune, people would almost be proud of the fact they did not have the ability to do numbers. They'd just say they can call an analyst and get everything they need. I think there's much more of an understanding that you have to have a basic awareness of finance to do this job.

I think Enron probably helped people a lot. There's always been a real bias toward personalities and characters being the story, rather than numbers being the story. In some cases, numbers can be the story. Business is about people in the end, and it does come down to characters. But you can zero in on different aspects of the numbers and still tell a good story. You still have to look at the numbers, too. So I think in that way, the business has changed. How do you top the Enron story? What's next for you?

Bethany McLean: I really, really try not to think that way, and obviously it's hard. Enron is kind of a once-in-a-lifetime thing - not just in writing a story that stands for so much, but also my luck when it was timed that we hit it when it began to slide. I'd like to say those were great skills, but it was a lot of luck. I think it's silly for me to look to top Enron, because the chances that another story like that will explode from the business pages like that, and I'm the one to do it, are pretty slim. … It's a dangerous way to think about things. It's really curiosity that leads you to good stories, not just the attitude that "I'm going to get a big story." If you approach it that way, you make stories into something that they aren't. You aren't being led by curiosity - you're being led in the wrong direction. I just try hard to work on things that are really interesting.

It's weird that if in 10 years, I'm still going to be Enron girl. That's terrifying. I have no illusions. If anybody knows my name now, it's going to be because of Enron. But I hope in 10 years I have done another good story where people say "Yeah, that was a good story. And she did Enron, too."

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